Tudor Investment Corporation is among a group of hedge funds whose bets on a US interest rate rise are making millions of dollars in profits this month.

Some funds are seizing opportunities in currencies and Treasury yields

The Greenwich, Connecticut-based firm, set up by billionaire trader Paul Tudor Jones, saw its flagship $8.3 billion BVI Global fund gain 1.8% this month to November 13, according to figures sent to investors and reviewed by The Wall Street Journal. Its $1.8 billion Discretionary Macro fund gained 1.7%, said a person who had seen the numbers.

Together that equates to a profit of around $180 million. Both funds were roughly flat for the year before November’s gains.

Like many so-called macro funds, which bet on bonds, currencies and stocks, Tudor is profiting from renewed market expectations that the Federal Reserve will raise interest rates in December after seven years of leaving them at near-zero.

Such funds—made famous by the likes of billionaire trader George Soros—are among the hedge funds most able to profit from interest rate changes. Many have struggled for returns in recent years as rates have stayed low.

Tudor has been running bets that short-term US Treasury yields will rise and the dollar will gain against the euro and the yen, another person who knows the fund said. Tudor declined to comment.

News earlier in November that US employers added 271,000 jobs, well above economists’ expectations of 183,000, in October proved a wake-up call for markets that a rate increase may come next month. It helped lift the dollar, which is up 3% against the euro this month, and 10-year Treasury yields, which are up around 6%.

"November has been good for macro in general,” said Nicolas Rousselet, head of hedge funds at Switzerland-based investment firm Unigestion.

Related

“Everyone is expecting a rate increase,” he said. “It’s a big hedge fund play to benefit from a rate increase,” and expectations of a rate increase.

Also gaining is Dymon Asia Capital, which runs $4.5 billion in assets and which posted double-digit losses this year to the end of last month. It saw its Dymon Asia Plus fund gain 3.9% this month to November 13. Dymon didn’t respond to requests for comment.

Computer-driven macro funds betting on market trends also profited. Two Sigma Investments, which runs $29 billion in assets, saw its Absolute Return Macro fund return 2.8% this month, another person familiar with the matter said. Secor Asset Management, which runs $30 billion, saw its $260 million Alpha fund gain 2.2% this month to Nov. 13, according to numbers sent to investors. The firm declined to comment.

Macro funds are on average up 2.1% this month to November 18, according to Hedge Fund Research. That has pared their losses in a mostly tough 2015 to 0.4%, with most funds holding similar bets on US Treasury yields moving higher, according to industry insiders.

Funds have also been increasing bets on the dollar rising against the euro in recent months, said Kevin Arenson, chief investment officer at Stenham Advisors, which runs $3.4 billion in assets. “A lot of hedge funds are seeing opportunities in currencies,” he said.

Brevan Howard’s flagship macro fund, which has also been betting on a rising dollar, is up 1% this month to November 13, taking gains this year to 0.5%, said a person who had seen the numbers.

Despite a strong run of performance in the second half of last year, macro funds have tended to struggle in recent years as central bank money printing has suppressed market volatility and made bond market trades harder to profit from. Funds lost money on average for three consecutive years from 2011 to 2013, according to HFR.

Some funds, including Dymon, were caught out by the surprise removal of the ceiling on the Swiss franc at the start of this year.

This week BlackRock said it was closing its Global Ascent macro fund. The fund had lost 9.4% this year and had shrunk to less than $1 billion after client redemptions. BlackRock pointed to “the headwinds that macro funds have faced” in a statement.